Chabahar Port Current Affairs

India and Iran have signed nine agreements, including one on connectivity related to strategic Chabahar port and on double taxation avoidance. These agreements were signed after bilateral talks between Prime Minister Narendra Modi and Iranian President Hassan Rouhani. The bilateral talks focused to boost cooperation in key areas of security, trade and energy. This was Hassan Rouhani’s first official state visit to India after he was elected Iran’s President in 2013. He had started his three-day visit from Hyderabad as the city has a long history of cultural and religious ties with Iran.

Signed Agreements are

Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to taxes on Income. It will avoid burden of double taxation between two countries in order to promote flow of investment and services.

MoU on Exemption from Visa requirement for holders of Diplomatic Passports. It will waive requirement of visa for travel of diplomatic passport holders in each country.

Exchange of Instrument of Ratification of Extradition Treaty. It brings into effect the Extradition Treaty signed between India and Iran in 2008.

Lease Contract for Shahid Beheshti Port- Phase 1 of Chabahar during Interim Period. It was signed between Port and Maritime Organization (PMO), Iran and India Ports Global Limited (IPGL). Leasing is for 18 months to take over operation of existing port facilities.

MoU on Cooperation in the field of Traditional Systems of Medicine. It seeks to develop and strengthen cooperation in traditional systems of medicine including regulation of teaching, practice, drugs and drugless therapies.

MoU on establishment of an Expert Group on Trade Remedy Measures to promote cooperation in areas of mutual interest. It aims to establish a framework of cooperation in area of Trade Remedial Measures viz. anti-dumping and counterveiling duty.

MoU on Cooperation in field of Health and Medicine. It seeks to establish comprehensive inter-ministerial and inter-institutional cooperation between two sides.

MoU on Postal Cooperation. It includes exchange of experience, knowledge and technology in e-commerce and logistics services; cooperation on philately, feasibility studies on using air and surface transit capacities of both countries.

The first phase of Iran’s Chabahar port (Shahid Beheshti Port) which holds significant strategic and economic importance for India was inaugurated was Iran’s President Hassan Rouhani.

It is Iran’s only oceanic port located on the Gulf of Oman, southeast of Iran near Pakistani border. It has been jointly developed by India, Iran and Afghanistan.

The first phase is expected to increase its cargo handling capacity to 8.5 million tons annually i.e. by over three times from the previous 2.5 million tons. It also includes five new piers, two of them for containers allowing cargo vessels with up to 100,000-ton captaincy to dock.

Background

The move to develop Shahid Beheshti Port was started in 2007. India’s intention to become major partner in project was made clear as long ago as in 2003. The overall development of port is planned in four phases and is expected to bring its total annual cargo capacity to 82 million tonnes. India, Iran and Afghanistan had signed Trilateral Transit and Trade Agreement to grant preferential treatment and tariff reductions at Chabahar to Indian goods headed toward Central Asia and Afghanistan. The port’s inauguration comes after the first consignment of 1.1 lakh tonnes wheat from India to Afghanistan was sent via Chabahar in November 2017.

Chabahar port will be also key for Indian goods to get access Central Asian markets and also provide alternate access to landlocked Afghanistan to regional and global markets. It can accommodate 100,000-tonne ships, which India feels has strategic and economic potential as rival to Gwadar port. The project is important as connects trade corridors that pass through Iran to sea route. It is also politically significant as it connects Iran with its eastern and northern neighbours and at a later stage to European states.

Future Prospects

Chabahar provides India with easier land-sea route to Afghanistan. India committed $500 million for development of Chabahar, with an aim to join increasingly important transport corridor to resource-rich regional countries.

Once the project is completed, Chabahar port will be linked with International North-South Transportation Corridor (INSTC), a multi-modal transportation route which links Indian Ocean and Persian Gulf to Caspian Sea via Iran, and onward to Eurasia and Europe.

India and Iran also have prepared massive investment plans to link port to Iran’s railroad network to facilitate transit of goods to neighbouring landlocked Central Asian countries, as well as open a route to eastern and northern Europe through Russia.